ROTHENBERG, J.
This consolidated appeal and cross-appeal contests the amount of damages awarded for a breach of contract that led to the constructive eviction and ultimate destruction of Katz Deli of Aventura's business. Because we agree that prospective lost profits was the correct measure of damages, and find no clear error with the trial court's factual finding that awarding prospective lost profits beyond the initial lease term would be too speculative, we affirm.
The Haibi family owned and operated a successful business, "Katz Deli of New York," in Pembroke Pines, Florida. After several years of successfully operating the deli in Pembroke Pines, the family decided to expand by opening a new location in Aventura. Katz Deli of Aventura ("Katz Aventura") leased a space in the Waterways Plaza of Aventura ("the Plaza") for that purpose.
The original lease at the Plaza was for a small location—approximately 4,828 square feet—and the deli operated successfully there for approximately two and a half years, with growing revenues in each annual sales cycle. In October of 2001, Katz Aventura formed a new corporation, "Katz Deli Restaurant & Marketplace" ("Katz Deli"), and signed a new lease with the Plaza landlord for a substantially larger space within the Plaza consisting of 15,336 square feet. Katz Deli reopened in the new, larger space in January 2002, which contained a deli and a small Jewish marketplace. Katz Aventura and Katz Deli (collectively "Katz"), though separate entities, were treated as the de facto same company for all relevant purposes of this case.
The initial lease for the new location required monthly rental payments of approximately $25,000, which were to commence in May 2002 and run through April 30, 2007, with built-in 3% annual rent increases. The lease also contained a clause allowing Katz up to three automatic lease renewals for five-year terms by giving six months' written notice to the landlord, which could potentially extend the lease through April 30, 2022.
Waterways purchased the Plaza subject to Katz's lease, and therefore became Katz's landlord in June 2002. During its due diligence before purchasing the Plaza, Waterways commissioned a study of the property, which showed that the roof of Katz Deli was "beyond repair" and needed to be replaced. Waterways did not timely make these roof repairs. Sometime in 2002, Katz's roof began to leak. Waterways attempted to make minor repairs to the roof, but nothing short of a full reroofing could have stopped the leaking. The leaks got progressively worse, eventually resulting in open flows of water into the premises and creating mold and a musty smell throughout the deli.
As a result of the leaks and smell, Katz suffered a substantial decrease in business and its reputation. By May 2003, the location was deemed unfit for use as a restaurant. Katz Aventura filed suit against Waterways soon thereafter on June 5, 2003, claiming breach of contract and constructive eviction. Katz fully paid its rent through May 2003, and voluntarily placed over $21,000 into the court registry upon filing suit to cover the June 2003 rent.
The repairs were completed in October 2003. Thereafter, Waterways partitioned the space and had already entered into new leases with two tenants, Sarah's Tent and China Bistro, for use of the space that had previously been occupied by Katz Deli at a substantially higher rental payment. These new tenants were still in that location and operating successfully at the time of trial despite the higher rental payments. Katz alleges that it was willfully evicted from the premises because Waterways knew that it could take advantage of a new market-rate lease.
Based on Waterways' actions, Katz brought suit for breach of contract and constructive eviction. Katz also filed a lis pendens for foreclosure of an equitable lien under a provision in the lease providing that, "Tenant shall look solely and only to the Landlord's interest in the Plaza in the event of any default or breach." At the conclusion of a bench trial, the trial court dismissed the equitable lien action, but found that Katz had been constructively evicted due to Waterways' gross negligence in failing to maintain the roof, and that Waterways had thereby breached the lease agreement.
At a separate hearing on damages, the trial court specifically found that Katz was a successful, ongoing business until the actions by the landlord caused Katz's business to decline. Katz called an expert accountant, Mr. Druckman, who calculated the projected lost profits resulting from the breach by using various accounting techniques.
The trial court ultimately found that Katz was entitled to future lost profits rather than the market value of the business, and awarded projected lost profits through the end of the initial lease term (April 2007), which totaled approximately $800,000 plus pre-judgment interest, but denied lost profits as to the renewal terms that potentially ran through 2022 because the trial court found that profits for this period were not reasonably certain. The trial court also denied recovery of various claimed out-of-pocket expenses Katz allegedly incurred due to the eviction, including pending food product purchases, destruction of equipment and inventory, and interest on loans taken out for the business. The trial court further awarded Katz attorney's fees as the prevailing party under a provision in the lease, but refused to apply a contingency fee multiplier because it found that a multiplier was not necessary in order for Katz to procure counsel in this case.
On appeal, Katz argues that: (1) it should be awarded the difference in rent between the amount Katz was paying under its favorable lease and the rent payments the new tenants were making plus its lost profits; (2) if lost profits alone is the proper method of calculation, it should be awarded lost profits through the end of the renewal periods in 2022; (3) the trial court improperly denied various out-of-pocket expenses caused by the leak; (4) the trial court erred by dismissing its equitable foreclosure and lis pendens; and (5) Katz should have been awarded a contingency fee multiplier for its attorney's fees.
Waterways cross-appeals, arguing that lost profits is not the proper method of calculation. Instead, Waterways claims that market value at the date of loss is the proper measure of damages, and because insufficient evidence was offered to establish the proper market value of Katz Deli, Katz should be awarded no damages.
A constructive eviction constitutes a breach of the covenant of quiet enjoyment. Barton v. Mitchell Co., 507 So.2d 148, 149 (Fla. 4th DCA 1987) (citing Richards v. Dodge, 150 So.2d 477 (Fla. 2d DCA 1963)). Furthermore, Waterways' grossly negligent failure to repair the roof as required by the lease was a breach of its contract. Barton, 507 So.2d at 149. In an action for breach of contract, the goal is to place the injured party in the position it would have been in had the other party not breached the contract so as to give the aggrieved party the benefit of its bargain. Lindon v. Dalton Hotel Corp., 49 So.3d 299, 305 (Fla. 5th DCA 2010); Ashland Oil, Inc. v. Pickard, 269 So.2d 714, 723 (Fla. 3d DCA 1972). However, a successful plaintiff "is not entitled to be placed,
Lindon, 49 So.3d at 306 (quoting Mnemonics, Inc. v. Max Davis Assocs., Inc., 808 So.2d 1278 (Fla. 5th DCA 2002) (internal citations omitted)).
The damages reasonably flowing from a breach can vary greatly depending on the factual circumstances surrounding the breach, and different methods of calculation may be employed to properly compensate a successful plaintiff. See Pathway Fin. v. Miami Int'l Realty Co., 588 So.2d 1000, 1005 (Fla. 3d DCA 1991) (holding that either reliance damages or expectation damages—lost profits in that context—could be awarded, but not both). Guided by these polestars, we now determine whether the trial court's damages award was proper in this case.
A trial court's determination as to the
This case presents us with a unique set of facts where the record does not disclose when exactly the negligent act and the breach of the lease occurred. The leaks began sometime in 2002, but the building did not become untenable until May 2003. It is similarly unclear what the "date of loss" would be under the market value theory of recovery, or what Katz's market value would be because its market value steadily declined due to the leaks caused by Waterways' grossly negligent behavior. To compound matters, Katz was not "completely destroyed" when the leaks
Waterways reached a new lease agreement with the subsequent tenants a mere twenty-six days after Katz moved out, before the roof repairs had even been completed. Waterways reached this new lease agreement very quickly and for substantially higher monthly rental payments. Thus, Katz could not have reopened its business at that location even if it had wanted to do so. Instead, Katz was forced to try to find another suitable location with insufficient capital and with a vastly decreased reputation. The record reflects that most of the company's (and the family's) money had been invested in the Aventura business and Katz had suffered substantial losses in its business reputation due to the leaky and moldy interior for the last year it was in business in the Plaza. Due to these factors, and others, Katz was not able to reopen at another location.
Under these unique circumstances, we hold that lost profits is a proper measure of damages because Waterways' long-term continuing breach of the contract allowed Katz to stay in business for a year, but slowly depreciated the market value of that business, thus rendering an award of market value damages insufficient to make Katz whole. As noted above, the primary goal in a breach of contract case is to restore the plaintiff to the position it would have been in had the contract been properly performed. The only remedy that sufficiently restores Katz on these facts is an award of lost profits that have been proven with reasonable certainty.
As to whether it was properly established that a budding new business was entitled to lost profits, the Florida Supreme Court has already answered that question in the affirmative. Lost profits are recoverable regardless of how well established a business is so long as there is some "yardstick" by which prospective profits can be measured:
W.W. Gay Mech. Contractor, Inc. v. Wharfside Two, Ltd., 545 So.2d 1348, 1350-51 (Fla.1989) (internal citations omitted).
"Any `yardstick' used to show the amount of profits must be reasonable, and the loss of the profits as a result of the [defendant's conduct] must be reasonably certain. Lost profits must be established with a reasonable degree of certainty and must be a natural consequence of the wrong." Sostchin, 847 So.2d at 1128 (internal citations omitted). The projected profits cannot be mere speculation or conjecture, Stensby v. Effjohn Oy Ab, 806 So.2d 542 (Fla. 3d DCA 2001), but the inability to prove a precise damages amount will not prevent a plaintiff from recovering so long as it is clear that some loss resulting from the defendant's actions is certain. Ardell v. Milner, 166 So.2d 714, 716 (Fla. 3d DCA 1964).
Katz's history of success at the Pembroke Pines location, at its former smaller location within the Plaza, and during its short tenure in the larger location prior to the leaks, demonstrate that this was a moderately successful deli that would have continued to yield profits if not for the leaks. The history of sales from these locations, along with the sales projections and unrebutted expert testimony calculating likely prospective profits, provided a sufficient yardstick by which to measure Katz Deli's prospective profits. As such, the use of lost profits as a measure of damages was proper in this case.
"Lost profits must be established with a reasonable degree of certainty and must be a natural consequence of the wrong." Sostchin, 847 So.2d at 1128. The fact that a party has not yet exercised an automatic renewal provision in a contract does not necessarily preclude it from recovering damages that extend to that portion of a lease. See State Rd. Dep't v. Tampa Bay Theaters, Inc., 208 So.2d 485, 486-87 (Fla. 2d DCA 1968) (finding that a party holding an option to renew its lease on land being used as a drive-in theater could be compensated for that renewal period in a condemnation proceeding); see also Sostchin, 847 So.2d at 1128 ("The term of the parties' lease does not define the duration of lost profit damages incurred. . . ."); but see Tolin v. Pearce-Simpson, Inc., 186 So.2d 65, 67 (Fla. 3d DCA 1966) (holding that when a renewal
Here, Katz argues it would have renewed its lease through the end of 2022 with reasonable certainty because the deli was operating successfully prior to the water leaks, and because its rent payment was well below market value. Indeed, Katz points to the subsequent tenants that were still operating in its former space in the Plaza at the time of trial in 2012 as evidence that it would have renewed its lease. Those successor tenants were paying substantially higher rent payments, but nonetheless continued to renew their leases with Waterways and operate their businesses through the end of the trial period below.
While this argument has merit, whether the lease renewal and the lost profits stemming from that renewal were reasonably certain is a question of fact to be determined by the finder of fact. Tampa Bay Theaters, 208 So.2d at 487. "When a cause is tried without a jury, the trial judge's findings of fact are clothed with a presumption of correctness on appeal, and these findings will not be disturbed unless the appellant can demonstrate that they are clearly erroneous." Universal Beverages Holdings, 902 So.2d at 290. The trial court, who is the finder of fact in a bench trial, made a specific finding that an award of lost profits extending past the initial lease term was too speculative. Although we may have found differently on these facts, we cannot say the trial court's conclusion was clearly erroneous, and therefore we affirm the trial court's denial of lost profits past the initial lease term.
In order for a lis pendens to be properly filed, there must be a "nexus between the legal or equitable title to the property and [the plaintiff's] claims below." Space Dev., Inc. v. Fla. One Constr., Inc., 657 So.2d 24, 24 (Fla. 4th DCA 1995). This nexus requires that the plaintiff's claim could potentially grant some interest in the realty itself before a lis pendens can be maintained. Okur v. Torres, 816 So.2d 1222, 1222 (Fla. 3d DCA 2002). In Okur, this Court found that a contract provision nearly identical to the one being asserted in this case does no more than limit the recovery of the tenant against the landlord; it does not provide an interest in the underlying realty. Id. We therefore find no error in the trial court's dismissal of the equitable foreclosure and lis pendens.
A trial court's decision to apply a contingency fee multiplier is reviewed for abuse of discretion. Lane v. Head, 566 So.2d 508, 510-11 (Fla.1990).
Standard Guar. Ins. Co. v. Quanstrom, 555 So.2d 828, 834 (Fla.1990). One of the most important reasons for imposing a contingency fee multiplier "is to provide access to competent counsel for those who could not otherwise afford it," to ensure that those parties are able to obtain counsel when it is unlikely that attorneys will take the case for fear of non-recovery. Bell v. U.S.B. Acquisition Co., 734 So.2d 403, 411 (Fla.1999).
In this case, Katz was able to obtain highly skilled counsel, and the evidence shows that any number of attorneys would have agreed to take the case on an hourly or contingent basis. No fee multiplier was necessary to protect Katz's rights where Waterways' liability appeared relatively certain. Thus, the trial court's denial of a fee multiplier was not an abuse of discretion.
Affirmed.
